Fiserv, Inc.
FISV · Nasdaq
FISV · Nasdaq
Reports Nov 4, 2026.
Consensus is $1.74 EPS for Sep 2026 across 9 estimates, ranging $1.68 to $1.80.
Fiserv’s second quarter was a below-consensus earnings print marked by broad revenue pressure, sharp margin compression and a lower full-year outlook. Adjusted EPS of $1.84 missed the $1.89 consensus by 2.65% and fell 26% from $2.47 a year ago. Adjusted revenue declined 4% to $4.96 billion, while organic revenue fell 5%. GAAP revenue was $5.29 billion, down from $5.52 billion a year ago and broadly above Q1’s $5.03 billion; GAAP EPS was $1.17 versus $1.86 last year and $1.07 in the prior quarter.
The key issue was profitability rather than volumes alone. Adjusted operating margin fell to 31.8% from 39.6%, as lower high-margin license and data-and-analytics revenue combined with higher personnel, technology infrastructure and transformation costs. Financial Solutions was the main drag, with revenue down 8% and margin down 1,000 basis points, while Merchant Solutions was comparatively stable at negative 1% revenue growth but still lost 460 basis points of margin. Fiserv also incurred $187 million of One Fiserv costs in the quarter. Management now expects 2026 organic revenue between negative 1% and 0% and adjusted EPS of $7.20-$7.40, while continuing debt refinancing and returning $100 million through share repurchases.
Fiserv’s top-line performance weakened further in the second quarter, particularly after adjusting for postage reimbursements. Adjusted revenue declined 4% year over year to $4.96 billion and organic revenue fell 5%, compared with a 3% organic decline in the first half. GAAP revenue declined 4% to $5.29 billion, largely because product revenue fell 17% to $1.00 billion while processing and services revenue was approximately flat at $4.29 billion.
Management attributed the decline to lower data-and-analytics sales and license revenue, as well as lower Argentina anticipation revenue and hardware revenue. The company lowered its full-year organic revenue outlook to negative 1% to 0% and expects adjusted EPS of $7.20-$7.40, while reiterating its medium-term growth targets.
Financial Solutions was the largest operating problem. Revenue declined 8% to $2.36 billion, with Digital Payments down 2%, Issuing down 4% and Banking down 2%. The segment’s operating income fell 27% to $912 million and its operating margin contracted 1,000 basis points to 38.7%.
The decline was driven primarily by lower high-margin license and data-and-analytics revenue across Digital Payments and Issuing, alongside higher personnel costs. The deterioration is significant because Financial Solutions remains Fiserv’s higher-margin segment, making mix pressure especially damaging to consolidated earnings.
Merchant Solutions was more resilient on revenue but not on profitability. Revenue declined 1% to $2.61 billion and organic revenue also fell 1%. Small Business revenue declined 1%, Enterprise was flat and Processing declined 1%. Small-business and Clover volume growth partially offset lower Argentina anticipation revenue, hardware revenue and data-and-analytics sales.
Operating income decreased 14% to $781 million, and operating margin fell to 30.0% from 34.6%. In addition to lower Argentina revenue and high-margin analytics sales, Fiserv cited higher payments to distribution partners. The quarter therefore showed underlying transaction and account growth without translating that activity into stable segment earnings.
The One Fiserv transformation materially affected reported profitability. The program generated $187 million of pretax expenses in the quarter and $329 million in the first six months, primarily for third-party fees, technology modernization, process reengineering and retention-related compensation. Severance costs added $40 million in the quarter.
Adjusted operating margin still declined to 31.8% from 39.6%, while GAAP operating margin fell to 19.2% from 30.7%. Companywide expense growth outpaced revenue: total expenses rose 12% to $4.28 billion, with management citing higher personnel costs, technology infrastructure spending and transformation costs. The adjustment explains part of the GAAP deterioration, but the lower adjusted margin shows that core operating pressure was also substantial.
Fiserv continued to generate substantial cash, although lower profitability reduced conversion. First-half operating cash flow was $2.08 billion, down 10% from $2.31 billion, and free cash flow was $1.36 billion versus $1.54 billion a year earlier. Capital expenditures increased 17% to $956 million, or about 9% of first-half revenue.
Capital allocation focused on debt management and modest repurchases. Fiserv issued €1.0 billion of senior notes at a weighted-average coupon of 4.0% and used the proceeds, commercial paper and operating cash to retire $1.41 billion of senior-note principal for $1.23 billion. The transactions produced a $154 million pretax gain. The company repurchased 1.7 million shares for $100 million in Q2 and had 40.8 million shares remaining under its authorization at June 30.
